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All the major economic news from Nigeria in 5 minutes – 20/6/2017

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Summary of the top business, economic and political news in Nigeria today.

 

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  1. The federal government has unveiled the ownership structure of the modular refineries it proposed to build in the states of the Niger Delta region, explaining that the states, host communities and private investors would jointly own and operate the refineries. Link
  2. The Minister of Finance, Mrs Kemi Adeosun has said that the government will soon release N350 billion, being the first tranche for capital votes implementation of the 2017 budget. “We are ready, we are having a cash-plan meeting very soon and after that, N350 billion will be released as first tranche of capital releases for the 2017 budget,’’ she said. Link
  3. Despite the Federal Government’s plan to produce 200,000 metric tonnes  of sugar yearly, its importation rate has risen. Findings revealed that between April this year and this year about 1.3 million tonnes of sugar  worth N190.3 billion ($501 million) were imported from Brazil. Link
  4. The Nigeria Customs Service (NCS) Apapa Area Command has handed over the seven imported containers  of fake pharmaceutical products from China to the National Agency for Food and Drugs Administration and Control (NAFDAC) in Lagos. Link
  5. The Standards Organisation of Nigeria (SON) has uncovered over N8billion worth of cloned cables at two residential buildings in the Ajangbadi area of Lagos. Its enforcement team uncovered the warehouses, where 20 different brands of cloned cables were kept. Made-in-Nigeria cables and other brands like NOCAN, Surecan, Necaco, Kablemex, Purecan and Nigertin, among others, were cloned in China. Link
  6. A mortgage firm has returned to the Economic and Financial Crimes Commission (EFCC) the N500 million said to be part of the Paris Club refund kept with it by a governor. Link
  7. The Oyo State government will install close circuit television (CCTV) cameras in strategic locations across the state, Governor Abiola Ajimobi said yesterday.The move, the governor said, would place Oyo among the league of states and communities under the “safe city project”. Link
  8. The Federal Government has unveiled a $300 million World Bank facility to support a new housing scheme known as the National Housing Finance Programme (NHFP). The initiative, according to the Deputy Director, Other Financial Institutions at the Central Bank of Nigeria (CBN), Mr. Adedeji Adesemoye is a Public Private Partnership (PPP) programme, designed to improve more access to financing housing projects in the country. Link
  9. INTELS Nigeria Limited has kicked against the decategorisation of port terminals by Nigerian Ports Authority (NPA) because it is not in the interest of the nation. The firm also warned that while it is a violation of the port concession agreement sealed and signed with the government, the action will lead to huge revenue loss to the Federal Government. Link
  10. Forte Oil Plc has said it is planning to sell shares worth N20bn to institutional and high net worth investors, and has applied for regulatory approval for the transaction. It said its core investor, Zenon Petroleum and Gas Limited, owned by billionaire, Femi Otedola, with a total stake of 62.97 per cent in the company, would not participate in the offer. Link
  11. The Akwa Ibom State government is determined to drag Total E&P Nigeria Limited to court over a tax liability of N25bn. A revenue consultant to the state government and Chief Executive Officer of Rom Flex Networks Limited, Mr. Eyo Bassey, said on Tuesday that TEPNG has been found to be serially negligent on its tax liabilities to the state government, noting that tax evasion is a criminal case. Link
  12. The vandalism of oil pipelines in the downstream sector of the petroleum industry recorded a drop of 12.77 per cent in April 2017, the monthly financial and operations report of the Nigerian National Petroleum Corporation has showed. Link
  13. Julius Berger Plc has announced its strategic partnership and joint investment with Petralon Energy Limited for the acquisition and development of oil fields in Nigeria. Link
  14. The House of Representatives Ad-hoc Committee on Shell Petroleum Development Company (SPDC) Relocation has praised the management of INTELS Nigeria Limited for sustaining high standards in its operations. INTELS implements international standards such as ISO 9001, ISO 14001, OHSAS 18001 and ABS Quality, which are unmatched in the maritime and oil and gas industries. Link
  15. Shell is considering whether to invest in a gas project in Nigeria’s southern Niger Delta energy hub, the managing director of the local unit said on Tuesday. Osagie Okunbor, managing director of Shell Petroleum Development Company of Nigeria (SPDC), said it was “on the verge of making a final investment decision” on a project in the city of Asa that would have a capacity of 300 million cubic feet. Link
  16. Etisalat has been instructed to transfer its 45 percent stake in Etisalat Nigeria to a loan trustee after debt restructuring talks with lenders failed, the Abu Dhabi telecoms company said on Tuesday. Link
  17. The transport section of Dangote Cement Ibese Plant has intercepted one of the company’s truck loaded with contrabands in Ibadan, and handed the drivers over to the Nigeria Customs Service for proper investigation and possible prosecution. Link
  18. The peace accord signed by the Federal Government and the Indian firm, Global Infrastructure Nigeria Limited, for the resolution of the Ajaokuta Steel Company’s legal tussle has been threatened by fresh demands by the GINL. Link
  19. Sinoma International Engineering Co Ltd has signed cement production contract worth $249.4 million with Nigeria’s Dangote Cement Plc. Link
  20. The Managing Director/Chief Executive Officer of the Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Kuru has disclosed that the corporation’s recent assessment of obligors as at December 31, 2016 identified 350 accounts with a current exposure of N2.5 trillion, representing about 80 per cent of AMCON’s total obligor debt. Link
  21. The Acting President, Yemi Osinbajo, on Tuesday said the Federal Government would soon release a second batch of the N701bn intervention fund to the Nigeria Bulk Electricity Trading Plc. Link
  22. Dr. Ifeanyi Ubah, the managing director of Capital Oil and Gas Limited has been released from DSS’s detention. Sources said the oil mogul was released yesterday night unconditionally by the Department of State Services after a “No Case” was established, following a tedious investigation by the DSS in his rift with the NNPC. Link
  23. United Capital Asset Management, a subsidiary of United Capital Plc, yesterday listed two billion units of the United Capital Wealth for Women Fund and 100,000 units of United Capital Nigerian Eurobond Fund on the Nigerian Stock Exchange (NSE). Link
  24. The federal government said on Monday it would use a fraction of the looted funds recovered so far to finance part of the 2017 budget. The Minister of Budget and National Planning, Udoma Udoma, said the total revenue projected was N5.08 trillion, with 11 per cent (about N559 billion) coming from the recoveries made. Link
  25. The Chairman, House of Representatives Committee on Banking and Currency, Hon. Sir Jones Chukwudi Onyereri, has said the House will not be lured into supporting the deceptive plot orchestrated by some people to lure Asset Management Corporation of Nigeria (AMCON) to purchase new debts from Deposit Money Banks (DMBs) in the country. Link
  26. The Speaker, Kano State House of Assembly, Kabiru Rurum, has denied a media report that he received N100m bribe to suspend the probe of Emir of Kano, Mallam Muhammad Sanusi II. Link

 

 

 

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Mudeerat Olawunmi is a graduate of Business Administration with over 5 years experience in online data gathering and analysis. Wunmi is a data analysts at Nairametrics and helps ensure that our readers get some of the most important macro and micro economic data required to help make investing decisions.

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Business News

Ecobank Transnational to hold AGM by proxies on June 30th

Due to the ravaging Coronavirus pandemic, ETI said the AGM will be held by proxies.

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Ecobank

Ecobank Transnational Incorporated (ETI) has announced the date and venue of its 32nd Annual General Meeting (AGM). According to a disclosure that was sent to the Nigerian Stock Exchange, the company’s AGM and an Extraordinary Meeting are scheduled to hold on June 30th, 2020, at Eko Hotels and Suites in Victoria Island, Lagos.

Due to the ravaging Coronavirus pandemic, ETI said the AGM will be held by proxies. The proxy AGM is expected to enable the Pan-African financial institution to abide by the directives issued by governments and agencies regarding COVID-19 and how to contain its spread.

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“As a responsible corporate citizen, ETI intends to strictly comply with this restriction in addition to other applicable health and safety measures. Accordingly, attendance at this year’s General Meetings shall be mainly by proxies in accordance with the Articles of Association of the Company and applicable law,” a statement by the company said.

To this end, shareholders have been advised to select any of the company’s top executives (including the Chairman, Emmanuel Ikazoboh, and the MD of Ecobank Nigeria, Patrick Akinwuntan) to represent and vote on their behalf during the AGM. Proxy forms may be downloaded from the company’s website, filled, and submitted in advance.

READ ALSO: NSE commemorates FBNQuest Merchant Bank’s N5 billion Bond Listing with Digital Closing Gong Ceremony

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Meanwhile, the issues that are up for discussion during the AGM and the Extra Ordinary meeting are enumerated below.

Annual General Meeting

1. Approval of the accounts
2. Appropriation of the Profits
3. Election of Directors
4. Ratification of the co-option of directors
5. Renewal of the appointment of the joint auditors
6. Approval of the Final Board Fees for Retiring Directors

Extraordinary General Meeting

1. Withdrawal of resolution on consolidation of shares
2. Amendment of the Articles

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Note that in Q1 2020, ETI reported profited after-tax from continuing operation of N66.4 billion, marking a 19% decline when compared to N81.9 billion during the comparable period in 2019.

ETI’s share price on the Nigerian Stock Exchange closed Friday’s trading session at N5.55. The company has a market capitalisation of about N137.3 billion according to information obtained from Bloomberg.

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NNPC raises alarm over low grade, contaminated diesel in the market

This warning was contained in a report by the Managing Director, NNPC Retail Limited Managing Director, Dr. Billy Okoye, who also admonished motorists to be careful of the off-spec products. 

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The Nigerian National Petroleum Corporation (NNPC) has raised alarm over the circulation of low grade and contaminated AGO, popularly known as diesel, which is offered at discounted prices in some parts of the country. 

This was disclosed in a press release by the Group General Manager, Group Public Affairs Division, Dr Kennie Obateru, on Friday June 5, 2020. 

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This warning was contained in a report by the Managing Director, NNPC Retail Limited Managing Director, Dr. Billy Okoye, who also admonished motorists to be careful of the off-spec products. 

READ MORE: FG projects $2 billion annual revenue from Escravos Gas project

The state oil giant, in the press statement, said, “The Nigerian National Petroleum Corporation (NNPC) has raised an alarm over prevalent low grade and contaminated AGO, otherwise called diesel, offered at discounted prices in parts of the country.” 

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Dr. Okoye, stated that the warning became necessary because the low grade contaminated diesel is harmful to machines and the environment. He explained that NNPC Retail Ltd is a market leader and therefore considered it incumbent upon it to alert the general public on the circulation of these low grade products. 

While urging consumers of the product to patronize the oil firm’s service stations where the quality of their products was assured, Dr. Okoye gave assurances that NNPC Retail Limited dealt only in premium high-quality products in the interest of Nigerian motorists and users. 

READ MORE: Fitch revises national ratings of GTBank, Zenith bank

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Unlike the premium motor spirit otherwise known as petrol, which was operating a fixed price regime and had NNPC as the sole importer, the diesel products were deregulated and had other independent marketers apart from NNPC importing the products as well. 

The intense competition and unhealthy drive for profit, in addition to poor regulation, could have given rise to this.  

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CBN debits banks another N459.7 billion for failure to meet CRR target

Sadly, this move, in addition to similar policies by the CBN, has left many banks cash-strapped and unable to pursue various profitable ventures.

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CBN

The Central Bank of Nigeria (CBN) has debited twenty-six banks, including merchant banks, to the tune of N459.7 billion for failure to meet their CRR (Cash Reserve Ratio) obligations. The fresh debit, which Nairametrics reliably gathered occurred yesterday, has left many stakeholders in the banking sector very upset.

The details: Among the banks that were most affected are United Bank for Africa Plc (N82.3 billion), First Bank of Nigeria Ltd (N59.3), Zenith Bank Plc (N50 billion), First City Monument Bank (FCMB) Limited (N45 billion), and Guaranty Trust Bank Plc (N40 billion). The rest of the affected banks can be seen in the table below.

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Note that the latest CRR debits are coming barely one month after a lot of banks were collectively debited to the tune of N1.4 trillion for the same reason in April. Between then and now, a lot of other minor CRR debits have occurred. Nairametrics understands that the apex bank now debits banks on a weekly basis.

Some backstory: During the CBN’s Monetary Policy Committee (MPC) meeting that was held last month, committee members voted to retain CRR rate at 27.5%. The rate was increased in January this year from 5% to its current level after the apex bank cited inflationary pressure concerns. What this means, therefore, is that Nigerian banks are required to keep 27.5% of their deposits as CRR with the Central Bank of Nigeria.

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But banks are silently upset: Sadly, this move, in addition to similar policies by the CBN, has left many banks cash-strapped and unable to pursue various profitable ventures. While reacting to the latest development, a banker who refused to be identified, said:

“What we’ve seen in recent times is that the CBN just indiscriminately debits banks, usually towards the stale-end of every week. They will look at your bank account and if your liquidity is plenty, they will debit you.

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“You know the central bank also does what we call retail FX intervention, that is when they sell FX to corporates. Now, because they don’t want banks coming with huge demands, what they do is that a day before the FX sales, they debit the banks so that the naira you have available is small and you cannot put them under pressure because of your FX demands. That has really been the driver.

READ ALSO: Central banks digital currencies pose a threat against the U.S dollar

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“We understand that the central bank had set up a special CRR team that is supposed to monitor banks’ CRR once a month. But now, the team monitors banks’ CRR on a weekly basis. This is why the central bank is effectively debiting banks on a weekly basis. Some weeks ago, they debited some banks about N1.4 trillion. That was one of many. Between that time and now, there have been more debits that have happened. But the debits that are huge/significant are what is troubling the banks. There was a N300 billion that happened about two weeks ago. and then yesterday that was this N459.7 billion that was also debited.

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“These are huge amounts that are leaving the banking sector. It’s a squeeze on the banks. A bank like First Bank, for instance, has about N1.4 trillion in CRR with the Central Bank. And there is Zenith Bank with equally as much as N1.5 trillion. These are monies that banks can potentially put in loans at 52% at 30%, or even put in money market instruments at maybe 10%. So, for a shareholder of these banks, this CRR debits are impairing the banks’ ability to increase their earnings because now are not able to use the funds that are legitimately theirs to create money for their shareholders. And the question is that under what framework is the Central Bank choosing to take people’s money?”

Heterodox Policies: The CBN has deployed several policies in the past two years that defy conventional solutions wisdom all in a bit to contain the devaluation of the naira and support fiscal measures that are yet to be complimentary.

This is why some analysts suggest this CRE policy is another one of those policies. An analyst with knowledge of this matter inform Nairametrics that it appears the CBN no longer relies on the 22.5% CRR charge but rather arbitrarily debit bank accounts.

Understanding CRR: The cash reserve requirement is the minimum amount banks are expected to retain with the Central Bank of Nigeria from customer deposits. In January, the CRR was increased from 5% to 27.5%  by the CBN Monetary Policy Committee (MPC) who explained that the decision was intended to address monetary-induced inflation whilst retaining the benefits from the CBN’s LDR policy.

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